Mojo - March 2010

As soon as House Democrats passed their history-making health care reform legislation, Republican leaders launched a comeback strategy: repeal the bill. "This is not the end of the fight, it is the beginning of the fight," Newt Gingrich wrote on Monday—a call echoed by Republican National Committee chair Michael Steele, Sen. John McCain, and Mitt Romney, as well as legions of disheartened Tea Party activists. Rep. Michele Bachmann and Sen. Jim DeMint quickly introduced measures in the House and Senate to overturn the legislation. But already the repeal-the-bill strategy is running into some trouble.

Take Rep. Brett Guthrie, a conservative Kentucky Republican who has voted with his party over 93 percent of the time. Moments after voting against the bill on Sunday, the first-term representative expressed measured support for elements of the legislation. "We always said there are things that we can all agree on in the bill," says Guthrie. When asked what Republicans should do next, he responded that he'd support repealing parts, but not all, of the bill—particularly the mandate which requires that Americans purchase health care. Later, Guthrie added that he thought rejecting the entire reform package and starting over would be "the best policy"— but he appeared to regard repealing select provisions of the legislation as the more practical option.

"Then we could preserve some of the things [in the bill] that we all agree upon," Guthrie says. "I think you saw a lot of us were for [prohibiting insurance companies from denying people coverage for] pre-existing conditions." Guthrie also points to the House's 406-19 vote in late February that removed an exemption for health insurance companies from anti-trust laws as evidence that "there could be bipartisan support for incremental health reform." (That provision was not included in the final health care legislation.)

Around the country, cash-strapped cities are facing a harsh reality: They lack the money to pay their employees, keep their schools open, and maintain public services for their citizens. Making matters worse for dozens of metropolitan hubs are obscure, toxic deals with the world's biggest banks called "interest rate swaps," a peculiar kind of financial contract that provided city governments with easy cash before the crisis but has now turned sour and cost taxpayers more than $1.25 billion a year, according to a new report (PDF) from labor union Service Employees International Union. Cities like Detroit, Chicago, and Denver will in 2010 pay big banks—Citigroup, Goldman Sachs, and JPMorgan Chase, among them—tens of millions of dollars in swaps payments, SEIU found; meanwhile, those same cities have previously cut tens and even hundreds of millions of dollars from their budgets to stay afloat. "These deals amount to the biggest taxpayer bailout of Wall Street you've never heard of," says SEIU Secretary-Treasurer Anna Burger.

What's an interest rate swap, you ask? Well, they're contracts that allow, say, Baltimore to enter into a deal with Bank of America to pay for public infrastructure projects. In that deal, Baltimore and BofA will "swap" interest rates with each other: the city will pay the bank a fixed rate—3 to 5 percent, say—to borrow money, and the bank will in return pay the city cash based on a floating, variable interest rate. (This is determined by some underlying source, like the LIBOR rate for short-term lending.) The point of a swap deal is that, when the economy was booming, cities could borrow from banks on the cheap, because their fixed payment rate was on par with or better than the bank's floating rate. But after the economy tanked, and the LIBOR rate dropped with it, banks emerged as the winners: Their variable payment rates to cities are now basement-low because overall interest rates are low. Cities, however, are still stuck with those higher fixed rates. Essentially they're getting fleeced.

And banks want to keep it that way. To do so, they've imposed steep termination fees to get out of an interest rate swap. To wit: Detroit, which has annual swaps payments of $103 million and faces a crippling budget shortfall, would have to pay $303 million to exit its swap deals. The same applies to most swaps deals throughout the country, which means most cities are saddled with onerous payments with no reprieve until the contract ends some years down the road. (That said, there have been a few instances where cities and banks renegotiated; Los Angeles' City Council voted earlier this month to terminate their swaps deals altogether, a decision that's catching on throughout the country.)

Of course, a swaps deal is a contract. Cities willingly entered into these deals with the likes of Goldman and JPMorgan. There's no doubt they're getting screwed now, paying banks way more than they're getting in return, but they agreed to the swaps back when everyone was binging on credit and living beyond their means. However, their citizens are the same people who bailed out the world's biggest banks, so perhaps everyone would be better off agreeing to kill the swaps deals and go their separate ways.

The AP is reporting that the Justice Department may be preparing to indict a trio of ex-Blackwater officials on weapons charges, including the company's former president, Gary Jackson. The potential charges are connected to a June 2008 raid on the company's North Carolina compound by federal agents, who seized nearly two dozen automatic weapons from Blackwater's armory. The guns, which included 17 Romanian AK-47s, had been purchased by Blackwater but were technically owned by the local sheriff's office, which had inked an agreement with the company to store the weapons.

The AP reports:

Multiple law enforcement officials familiar with the case said investigators are trying to determine if Blackwater obtained the official letterhead of a local sheriff to create a false justification for buying the guns. The officials spoke on condition of anonymity because they were not authorized to discuss the investigation.

Federal law prohibits private parties from buying fully automatic weapons registered after 1986, but does let law enforcement agencies have them.

Reports of weapons-related improprieties have dogged Blackwater for years. In the past, federal investigators have probed whether the company had illegally smuggled guns (and silencers) into Iraq that wound up in the hands of a Kurdish group designated by the US as a terrorist organization. In court documents, two former Blackwater employees also alleged that the company had smuggled contraband weapons, sometimes hiding them in bags of dog food. Last month, a Senate committee revealed that personnel working for a Blackwater-subsidiary in Afghanistan had aquired hundreds of AK-47s and other weapons they were unauthorized to have from an armory that's meant to equip the Afghan National Police. In one case, a Blackwater contractor signed for a trove of guns using the alias Eric Cartman, an apparent reference to the South Park character.

Senator Lindsey Graham (R-S.C.) laid it on thick at AIPAC's annual gala banquet on Monday. Referring to the pro-Israel lobby, Graham declared, "The Congress has your back." (What other lobby would he say that to?) He declared that Israel is "our best friend in the world." (Does that tick off Canadians?) But Graham went especially far when he endorsed the idea of a military strike against Iran.

The former Navy judge advocate told the thousands of AIPACers that when it comes to dealing with Iran and the possibility it will develop nuclear weapons, "all options must be on the table" and "you know exactly what I'm talking about." He then made the obligatory comments, saying that war is a "terrible thing" and that he hoped it could be avoided. But added Graham, a member of the Senate armed services committee, "sometimes it is better to go to war than to allow the Holocaust to develop a second time." And he told the crowd that "time is not on our side" and that this AIPAC conference could be the last of the lobby's annual get-togethers before Iran possesses nuclear weapons. Military action ought to be taken against Iran, he said, before the country acquires a nuclear bomb.

But Graham noted that any such military strike should not be limited to targeting the country's nuclear program:

If military force is ever employed, it should be done in a decisive fashion. The Iran government's ability to wage conventional war against its neighbors and our troops in the region should not exist. They should not have one plane that can fly or one ship that can float.

Graham was talking about a wide-scale attack on Iran—and one that might have take place within the next year. Destroying Iran's military—which has about 130,000 regular soldiers and 14 air bases throughought the country—would entail a major assault, and it could trigger Iranian attacks elsewhere in the region. It would be a rather good-sized war. But nothing less will suffice, Graham insisted. And the crowd applauded.

Yes, it's true. The Association of Community Organizations for Reform Now—known by most of America as ACORN, and by Inner America as "that dastardly evil fifth column of race-baiting, socialist election racketeers"—is officially kaput, having announced its own demise just a day after Congress passed sweeping reform that would provide health insurance—for the first time—to many of the same urban poor ACORN sought to help.

"It's really declining revenue in the face of a series of attacks from partisan operatives and right-wing activists that have taken away our ability to raise the resources we need," ACORN spokesman Kevin Whelan said in announcing the group's intentions to fold.

This was not a terribly surprising move; last month, we at Mother Jones predicted as much after ACORN's biggest state organizations—in California and New York—shuttered. And while no one's shocked that the overwhelming tide of right-wing rancor made the group's business—mostly advice and voter registration—impossible, it's still mystifying why this group got retrogressives' goat to such a grand extent.

In a brisk, no-frills 20-minute session, Sen. Chris Dodd's version of a sprawling financial reform bill was passed by the Senate banking committee—13 Democrats to 10 Republicans—and moves on to what will surely be a legislative war on the Senate floor. Today's mark-up session by the banking committee was meant to be a debate among committee members over nearly 400 amendments to Dodd's original bill (PDF), released last week. But lawmakers instead approved a manager's amendment to the bill, which makes a number of technical and rhetorical tweaks to Dodd's bill, then voted on the bill entirely, knowing that a Democratic majority would pass it and set up the real debate in the Senate.

There was an anticlimactic feeling surrounding the event, and a few senators, including several Republicans, didn't even show up to the mark-up and voted by proxy. Sen. Bob Corker (R-Tenn.), a top GOP negotiator on the Dodd bill before talks broke down, had hinted earlier today that a low-key vote would happen, and predicted that the Senate would take up the bill after Easter. "It's probably true that we have a better opportunity with a different cast of characters, the full Senate, to do something that is sound policy-wise," Corker told CNBC today.

The quick vote today is undoubtedly an indication that senators handling financial reform didn't want a health care-like battle in committee. For months, health care talks were bogged down in the Senate finance committee, between Sen. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa), but by skipping over contentious amendments today, Dodd and his colleagues bypassed a several weeks' worth of infighting. The mark-up today marked a shift in GOP tactics more than anything. At several points in the meeting, Dodd, the banking committee's chair, asked GOP counterparts whether they wanted to make any statements or comment on the bill, but those in attendance all declined but for brief remarks by Shelby, the ranking member. Bypassing the committee negotiations was clearly a decision made by Senate Republicans to fight it out on the Senate floor, where the Dems enjoy a slim majority but Republicans have gained momentum. The Senate floor is also a more visible, high profile venue—center court, if you will—to lay out their hundreds of amendments.

Those amendments range from watering down an independent consumer agency to declawing a council of regulators that would guard against systemic, AIG-like risk. So while today's brief affair might've brought the negotiations to prime time sooner, all those amendments will still see the light of day in a few weeks. The battle over Wall Street is still coming.

"Holy Crap," I thought when my editor forwarded me today's AIPAC press release, supposedly calling for a freeze on Israeli settlements. It turns out the statement, which would have been a massive departure from traditional AIPAC policies, was a stunt orchestrated by the anti-everything activist organization Code Pink. I wasn't the only person who got punk'd: NPR, C-SPAN and Al Jazeera all ran with the story before news broke that it was false.

Code Pink has so far refused to admit how they pulled it off. But it's clear that the press release was sent from a fake email address mirroring that of AIPAC media director Josh Block: block@aipac.org. His real email is jblock@aipac.org.

For much of the past fifty years, AIPAC has gained massive support in the American Jewish community. But as Israeli policy toward Palestinians became increasingly out of step with American liberals, Jews began taking a softer approach to the debate. As Robert Dreyfuss explained last September for Mother Jones, these liberals have mounted a challenge to the AIPAC hegemony under the banner of J Street, the self-proclaimed "pro-Israel, pro-peace" lobby. Today's statement would have been a momentus agreement between the foes on a national security matter.

Police training has been a crucial part of American counterinsurgency warfare and global policy for a long, long time. During the American occupation of Haiti, which began in 1915, the establishment and training of an American-led Gendarmerie d'Haiti would contribute to the sad, brutal modern history of that island; in the late 1950s and 1960s, U.S. police training helped shape South Vietnam into a quasi-police state ready to wield torture as a weapon of daily life; in Latin America in the 1960s and 1970s, U.S. police training under thuggish dictatorships led to torture and extrajudicial killings, a history painfully captured in journalist A.J. Langguth's presciently titled book Hidden Terrors; in Central America in the 1980s, it led to a flowering of extrajudicial death squads. The story of U.S. police training could, in many ways, act as a substitute history of human rights violations.

All in all, it's not a pretty tale and it's not a history that's left this country untouched, as Alfred McCoy, an expert in police training and counterinsurgency as well as the author of Policing the Empire, wrote for TomDispatch last November. What happens in our distant counterinsurgency wars, including the policing part of them, has a nasty habit of returning to these shores as ever more repressive surveillance and policing techniques in "the homeland."

This morning, our estimable DC bureau chief, David Corn, explained how both political parties will persist in pretty much the same war posture they'd sustained before Sunday's health care vote. But those politicos' fortunes continue to be tied to the guerrilla theater of the patriot set: the Tea Party movement and allied groups like the Oath Keepers, who vow that they'll destroy the union in order to save it. And there's much destroying left to do. As the Washington Independent's David Weigel described the protesters' zeitgeist on the National Mall late Sunday: "Just because the bill had passed didn’t mean they couldn't kill it."

The Tea Parties' enduring contribution to the American pageant, though, may be to bring about a massive electoral reaction against their positions. As time passes, more Americans may realize that Sunday was not "the day that America turned its back on our unique system of democratic capitalism," as ex-Sen. Rick Santorum put it. Rather than joining Santorum's "freedom-loving patriots" in a "fight against this tyranny to reclaim our birthright," more Americans may focus on the loudest, most unnerving elements in the patriot crowd: the politically illiterate, paranoid, and racist. The party will live on, to be sure—but unless its tack changes considerably, it may live on in mainstream politics as a punch line; in textbooks, as a cautionary tale; in gun shows, as a vehicle for bumper-sticker and shotgun sales.